Dubai Inc's sizeable 2012 debt maturities have been viewed with trepidation for some time but a good start to this year has improved sentiment around even troubled credits.
The three most challenged borrowers were Dubai Holding Commercial Operations Group (DHCOG), Dubai International Financial Centre Investments (DIFCI) and Jebel Ali Free Zone (JAFZA), which faced maturities totalling about USD3.75bn.
Promisingly Dubai passed its first big test when DHCOG, a unit of Dubai Holding, which is owned by Dubai ruler Sheikh Mohammed bin Rashid, paid its USD500m obligation a few weeks ahead of its February due date. "There is a key distinction to make between a refinancing and a straight repayment," said a Gulf-based analyst. "DHCOG managed to pay down its obligation through operating cashflows and divestiture of non-core assets, implying credit quality. Dubai Inc risk decreased as a result."
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